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Over the past month, we’ve been talking to city officials, small businesses, and other stakeholders to test out some of ideas for our visualization tool in order to guide our prototype. Here were some of the possible storylines we’ve been pursuing and discussing as a framework to get into larger issues within the procurement process:

Transparency & RFP process Should the public have better access to Philadelphia’s RFP decision making, such as access to winning and losing proposals?

Minority Businesses and City ContractsExplore the city’s goals and realities surrounding minority and women-owned business contractors. Both professional services (contracts) and procurement.

Assessing the cost of drug and mental health problemsMental health and drug addiction services are the largest single expenditure in the city’s budget, with a single nonprofit receiving the lion’s share of these funds. We could look at all areas of city’s budget in an effort to build holistic assessment of costs related of drug and mental health issues, and compare expenditures to spending by other large cities.

What is government spending and how does it work? Provideoverview of procurement spending in relation/proportionally to the rest of Philly’s spending. Show and explain types of government contracts, including procurement and RFPs. Show in context with overall city spending. Provide a audio overview and story to explain how the process works.

Although everyone has their pet issue, we’re quickly learning that for this stage in our prototype, our most important contribution will be to provide a clear explanation and visualization of government spending, especially in the context of overall government spending. As such, we’re currently working on building a prototype for idea #4. We’ll write a more detailed post on what that entails in our next post.

Over the past month, we’ve spent some time interviewing government officials and businesses about Philly’s government contract process and tech systems in order to understand what the perceptions are of its challenges. Here’s what we heard.

Despite the city’s goal of 25% of all contracts going to Minority and Women Owned Businesses, many are not able to participate. According to the Office of Economic Opportunity, men of color got 22 percent of workforce hours on finished city contracts, while women got less than 2 percent. While the lack of mentoring programs contributes to these numbers, some people also point to the city’s rules regarding using union labor, as well as the gender and racial composition of unions. Under city regulations, any city projects over $3 million must go to union shops. However, in 2012 building trade unions were 99 percent male and 76 percent white (according to reporter Tom Ferrick).

Reporting and compliance systems are outdated, cumbersome, and don’t communicate with each other, leading to lag times in vendor payments and reporting.

Small businesses have the perception that contracts go to repeat vendors, who must be well-connected with the city to secure a contract.

Businesses see RFPs as being too prescriptive and too narrow, which discourages broader participation and big thinking on how to solve problems.

Vendors complain that the contract process is not transparent. Vendors can’t see applications of who else applied to evaluate their merits, pricing, and approach.

Logistical requirements discourage broader participation. The time and money required to bid, as well as other requirements such as proving the vendor has no ties to IRA or South Sudan, make it incredibly onerous and expensive for start-ups and smaller firms to compete.

Small businesses see vendor Q &A meetings as a waste of time.

Some businesses complain that the city contracts with vendors who might have offshore operations, thereby diverting money from the city and from vendors who have Philly-based employees.

It’s been important for us to hear the unique perspectives of smaller vendors and government employes. So where does this input leave us? We’ll walk you through our project ideas in out next blog post.

Interest in procurement reform has been steadily growing over the past few years. Although procurement innovation is in its infancy, there are a number of new procurement tools, approaches, and policies being developed and piloted by cities, private companies, foundations, nonprofits, and civic hackers.

Most of them fall into one of three categories, which I’ve sketched out below in this very basic affinity map: commercial products, transparency efforts, experimentation.

Commercial products aren’t really what we’re interested in, though it’s been important for us to know the landscape of what’s out there–mostly solutions for gov that involve bringing procurement processes online, subscription services for vendors to get notified of RFPs and other opportunities, and customizable forms.

Our interest lies more firmly in the various tools and projects that exist to create and incentivize more transparency around procurement, and to reform the thorny and outdated service procurement/RFP process. Some examples:

Open Procure: lists cities’ public agencies and their respective procurement thresholds.

ChileCompra: Chile is killing it in the area of procurement innovation and transparency! This is is a centralized portal for businesses to search for opportunities, get training, receive payments, file complaints, etc.

Beacon, Scout, Conductor: this trio of procurement technologies was developed for Pittsburgh by Code for America fellows, and notifies businesses about opportunities and how to apply for them (Beacon), lets gov staff track contracts currently in place (Scout), and tracks contracts through the renewal, bidding and extension processes (Conductor).

Code for America procurement work: in addition to the work in Pittsburgh, CfA is doing a number of other interesting procurement projects in around the country, including this terrific project in California to streamline the RFP process to reform the state’s badly outdated systems that are powering its Child Welfare System.

Sunlight Foundation’s Open Data Guidelines: this set of guidelines has been useful in thinking through where Philly is hitting the mark, and where it’s falling short, in its efforts to make procurement data fully transparent and accessible.

OpenRFPs: this project seeks to make all information about RFPs in cities around the country more transparent, and to put everything in standardized format.

CityMart and the problem-based procurement movement: As I mentioned in my previous post, one of the challenges to service innovation in cities (whether we are talking about technology, human services, etc) that experts have identified is the RFP process itself. When the problem and solution are already detailed by the city issuing the RFP, it cuts vendors out of the proposal process, narrows the range of solutions, and maintains the status quo. The non-profit CityMart has been experimenting with what’s being called “problem-based procurement” in Barcelona and several cities around the U.S. (including Philly–more on that later). Problem-based procurement proposes that cities lead with a statement of the problem and let vendors explore solutions. From traffic monitoring to waste management to youth unemployment, CityMart has pushed RFPs in an exciting new direction that we are eager to learn more about.

Do you know of other exciting tools or approaches we should be exploring? Let us know.

In our journey to understand Philly’s procurement process (with a focus on services, or RFPs) we’re surveying the landscape of procurement reform, while also trying to understand the factors that make procurement innovation difficult.

What’s broken

Governments face similar challenges to modernizing their procurement processes. These challenges can be roughly put to two buckets: technology challenges and policy challenges.

Technology Challenges

First and foremost, many local and state governments are dealing with antiquated legacy technology systems, lumbering beasts that make inputting and accessing information extremely difficult. Procurement data may be spread across multiple websites, might be in different systems, or might still be in paper form. As a 2013 report by Philadelphia’s controller observed:

“Manually intensive, redundant and time consuming best describes the City’s procurement workflow practices. Procurement Department management reported that it takes on average 14 days to create a requisition, 18 days to select a vendor, 30 days to create a contract, and 76 days to create an invitation to bid. City departments will continue to use petty cash, direct purchase orders, emergency orders, and stockpiling to circumvent the slow process of ordering goods and services.”

Furthermore, implementing new systems is extremely costly, time-consuming, and many governments are skeptical of purchasing new systems which run the risk of quickly becoming obsolete in a rapidly evolving digital era.

Policy Challenges

The other obstacles to procurement modernization and innovation have to do with policy challenges. Arcane procurement regulations can make it difficult to navigate the process and apply for RFPs. In addition, many Vendors often complain that RFPs are overly prescriptive, and that some are designed to exclude most but one or two vendors who could meet the qualifications. Many RFPs are written with both the problem and the solution already outlines, which stifles the possibility of out-of-the-box thinking about alternative solutions. As a result, contracts tend to be awarded to the same large, long-standing vendors. The costs are not just to new businesses, who miss out on opportunities to win contracts, but to the city as a whole. The same 2013 Philadelphia Controller’s report noted:

“Restrictions imposed by the City Charter have inadvertently reduced the number of qualified companies willing to bid, and will continue to inhibit the City’s ability to take advantage of longer term contracts, consequently increasing acquisition costs by millions of dollars per year. In fiscal 2011 there was only an average of three bids per solicitation and eight percent of contracts were awarded to single bidders.”

Other challenges

Many cities also struggle with attracting women and minority-owned businesses, a problem that is particularly acute in Philadelphia. Although the city is nearly 50% African American, its vendors do not reflect the city’s demographics. The City’s goal is to have 50% of its vendors owned by women or minorities, a goal which, so far, it has fallen short of. Lack of access to capital, financing, and mentorship opportunities are all cited as critical reasons for the low number of minorities receiving city contracts.

Finally, as I noted in my previous post, the Open Data movement is still very much in its infancy, and so publicly available information tends to be spotty and incomplete. Without a complete and accurate picture of a city’s procurement expenditures and processes, elected officials, the media, vendors, and concerned citizens are likely to not fully understand the areas for reform.

In addition to interviewing people about the Philadelphia procurement process, we’re doing a deep dive into understanding what’s available–and what’s not–on the city’s procurement sites. Turns out, things are much more intricate and complex than we expected, and that the information that is NOT available might be more interesting to our project than what is. What do I mean by that?

First things first: there are two ways in which vendors can enter into contracts with the city.

Procurement refers to a process where a contract is bid on and awarded to the lowest responsible bidder. These bids include concessions, public works projects, supplies, and services. Here’s an example: an open bid for a vendor to supply sandwiches to prisoners. The city is specific about everything from quantities to ingredients to the nutritional value of the ingredients.

This bid will go to the lowest bidder who meets the criteria outlined in the bid (which are mostly related to safety, working conditions, etc).

These contracts are executed for one-year terms with 3-year renewals. Currently, vendors can access them on two different sites, here (for Services, Supplies and Equipment, aka SS&E) and here (for Public Works).

Second, there are RFPs (Request for Proposals), aka “Professional Services.” These include everything from social services to architecture services, housing, and even ticket vendors:

RFPs are overseen and issued by Finance, and are awarded to the best proposal. Vendors find these contracts here (on e-Contract Philly) and here (another city website; it’s unclear as to why it’s separate from e-Contract).

Then there are smaller and more experimental RFPs that are available through a site called BigIdeasPHL. This is where Philly government is experimenting with asking local firms (tech and creative) to come up interesting solutions to more open-ended challenges, with a maximum budget of $32K per project. Check out this one on traffic knowledge and behavior.

That’s five sites through which vendors can access information on government contracts!

Digging into each site in detail revealed limitations. First of all, current available data on the site for winning proposals is spotty and only goes back a couple of years, maximum. Thankfully, the city’s Open Data portal provides a detailed overview of the city’s procurement and professional services expenditures, as well as a couple of nice pie charts to visualize spending. It also provides links to the CSV files of available information. That’s a great starting place for us.

However, in addition to the inherent clunkiness of the user experience, we were curious as to how many vendors applied for any given contract, what the proposals were, and why they won, especially for professional services (RFPs). While we were able to see who the competing vendors were for the RFPs, none of their proposals, or the winning proposal, are accessible online. Since RFPs tend to be for things like social services and housing, and go to the best proposal, rather than the lowest bidder, it seems to us that that information should be publicly available. It’s a puzzle: RFPs tend to be where the most interesting and potentially innovative public-private partnerships are, and also where there is the least amount of transparency.

We started to wonder: Why are RFP processes closed to the general public? When does having a closed process help? When does it cause problems? Why can’t the public readily access applicant data? What would it show us to see it? Are RFPs open in other cities? How do RFPs fit into larger picture of contract spending?

We’ll be exploring all these questions and more as we continue to interview people from government, media, and vendors themselves.

As part of our grant from the Knight Foundation’s Prototype Fund, I went to the LUMA Institute in Pittsburgh for a two-day training in their human-centered design methods. All the Knight Prototype Fund grantees were there for this crash course in the hows and whys of using a human-centered approach to designing our projects. We mapped stakeholders, created trees envisioning the causes and effects of problems, brainstormed and prototyped solutions to seemingly intractable problems. Although I’ve done a lot of these types of exercises before, and have led workshops in using a HCD-approach to solving problems, it was the first time I’ve explicitly used the process on one of my own projects, and I found it incredibly helpful.

Of of the fundamental challenges we face in designing this project is answering the “Who is this for?” and “So what?” questions. Considering our stakeholders and what their needs are by literally them out was an important first step. We know our audience for this project is likely to be city government, media, elected officials (like city council members), citizen watchdog groups, and perhaps the occasional actively-engaged citizen. But what will they use the tool for? Why is it important to their work? These are questions we can only answer through the first stage of our design process, which will be to interview key people in and outside of government about the current state of the procurement system and the associated data. We’ll be testing key hypotheses about the project, including who might want to use it and how, and we’ll necessarily be open to switching course if necessary.

This is the hard, but important, lesson for all of us as grantees to internalize. Many of us take a design-first, or data-first, or problem-first approach to the challenges we are trying to solve. We need to start with people.

Here is the way we are currently framing our challenge:

“How might we make the city of Philadelphia’s procurement data easily accessible to the widest number of people possible, in a way that can positively transform public policies and processes?”

Hey there! Welcome to the Visible Contracts blog. We’re Amanda and Neil, and we’re working on a project to make the city of Philadelphia’s contract data more understandable and transparent for everyone. Why city contract data?

Well, city contracts (also known as “procurement”) are important to the everyday experience of its citizens. Government contracts include every local service for which a government needs to hire outside people and businesses. City (and federal) governments hire folks to do everything from building roads to managing social services to developing websites.

The money they use to hire people comes from you–the taxpayer. That makes it really important for businesses and citizens to have transparent and efficient procurement processes. In recent years some city governments have taken on the task of ensuring that bids are easily accessible, and that the data about winning bids is available on public websites. The city of Philadelphia has been working on making open data a priority in general, streamlining access to bids and making it easier for smaller businesses to bid on government projects through the development of a centralized, online city contracts and procurement hub. That’s pretty great.

So where do we come in? We believe that what’s missing from the conversation around streamlining the bidding processes is a full accounting and understanding of the money government spends on contracts. Because government contracts are a major part of local budget expenditures, and are critical to many of the services we receive as citizens, we want that information to be easy to access, navigate, understand and contextualize. It’s something which we consider to be an essential part of making procurement more transparent and we believe that a great visualization can help achieve those goals.

Armed with a grant from the Knight Foundation’s Prototype fund, over the next six months we will test our assumptions. We’ll talk to various people who have a vested interest in the process and build an interactive website which we hope will shed light on the city’s contract expenditures.